Microsoft to extend Xbox 360 hire purchase scheme, may be trail for Xbox Next

The Wall Street Journal reports Microsoft plans to extend its Xbox 360 subscription plan, where buyers pay $99 and then $19.99 per month for two years for an Xbox 360 and Kinect bundle, beyond its Microsoft stores to all U.S. Best Buy Co. stores and a "select" grouping of GameStop Corp. stores. The deal includes access to Xbox Live Gold (usually around $60 per year).

Microsoft still considers the scheme a pilot, noting that consumers have responded well so far. While many feel the deal is all about supporting “soft” Xbox sales as the current generation comes to an end, Lewis Ward, an analyst at IDC, speculates that it is all about preparing customers for the same deal next year, when the next version of the Xbox console is expected to be announced.

Microsoft has positioned the Xbox 360 as the premier entertainment computer, and while the current deal makes little sense now, with game console generations traditionally very long, it makes a lot of sense for the next Xbox, and would provide Microsoft with the ability to sell a console with a low up-front costs right at the beginning of a gaming generation, traditionally difficult due to the high cost of new components.

More important, Rick Sherlund, an analyst with Nomura Securities, said, is generating a larger audience for the Xbox Live service—especially now that Microsoft has announced Xbox Live will appear as an application in Windows 8 for both PCs and tablets when it is released later this year.

With Microsoft also offering cross-platform applications in the form of Smart Glass to interact with the console, it is clear Microsoft intends to cement the console as the centre of the living room.

Xbox Next, with the way their software is heading at the moment, is going to blow the socks off of any other console systems.

Anonymous

People do it with smartphones, so why not consoles? A nice way of subsidizing the expensive initial cost of a new, powerful console. Might be able to get Xbox Next for, what, $200??? Why hasn’t anyone thought of this before???

TroyGates

They needed a big enough base of costumers before they could run something like this. Cell phones weren’t subsidized when they first came out. It was years later when they had a solid base of customers and wanted to get them hooked into contracts that they started subsidizing.